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Eir bids to refinance €1.6bn of loans

Eir has launched a process to cut the cost of its debts, by asking lenders to accept lower interest payments.

Last summer Eir, formerly Eircom, reaped savings of €17m a year when it refinanced bonds that carried a 9.25pc interest rate and were set to mature in 2020, with new bonds issued at a rate of 4.5pc.

The company said last night that it has now launched a process to refinance €1.6bn of loans that carry an interest rate of 4pc over euribor. A meeting of banks is scheduled to take place today in London.

Goldman Sachs has been appointed “lead left bookrunner,” in effect the lead adviser among a syndicate of banks made up of Deutsche Bank and JP Morgan who will manage the deal.

The current debt has been in place since 2012, when the company emerged from Examinership, though it has been amended and reduced from an original €2.377bn in the period since then.

Eir’s net debt was €2,206bn at the end of December, including the senior loans and bonds.

The senior loans that are being refinanced weren’t due to mature until 2022. When the original loans were put in place in 2012 they were held by banks and investment funds that also owned the former Eircom, following its Examinership.

For two years after the insolvency process the loans and shares were stapled – so that any investor selling one had to sell an equal share of the other.

Since that ended, the mix of investors holding loans or shares in Eir has diverged enormously. Eir, led by ceo Richard Moate, is now 40pc-owned by New York-based private equity group Anchorage.

Last summer Eir tapped the bond market for €700m – more than the €350m it originally sought – as investor demand boosted the amount it could borrow. It used the new debt to repay €350m of expensive high-yield bonds and to repay a share of its senior loans.

Its latest refinancing is likely to include offering current lenders a choice of being repaid or rolling into a new facility.
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